Lucinda Creighton (Dublin South East, Fine Gael)
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Question 159: To ask the Minister for Finance if the recently revealed deposit of €7.45 billion by a bank (details supplied) in Anglo-Irish Bank is the only deposit of this type of which he is aware; if other deposits of this nature occurred at other times in the preceding five years; and if he will make a statement on the matter. [7331/09]

Lucinda Creighton (Dublin South East, Fine Gael)
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Question 160: To ask the Minister for Finance if Anglo Irish Bank made deposits in a bank (details supplied) similar in nature or type to the recently revealed deposit of €7.45 billion by the bank in Anglo Irish Bank; and if he will make a statement on the matter. [7332/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 159 and 160 together.

As the Deputy will be aware Anglo Irish Bank is now a nationalised bank and operating on a commercial basis at arms length from Government. Certain transactions between Anglo and IL&P that took place last year, prior to nationalisation, have given rise to serious concern and are subject of investigations. In a press release on Friday 13 February 2009 Anglo indicate the following:

"Anglo Irish Bank Corporation has had an active counterparty relationship with ILP for a long period of time. As part of ongoing business activity, this relationship has included placements and receipts of deposits from bank and non-bank affiliates, with transactions categorised as deposits from banks or non-retail customers as appropriate. Since the onset of the global liquidity crisis, this level of business activity intensified to significant levels and reflected the mutual provision of support by each institution. Anglo Irish Bank confirms that it sought and received deposits from ILP during 2008, including the last two weeks of September 2008.

Anglo Irish Bank's Annual Report & Accounts explain the following in respect of the Group's balance sheet which totalled €101 billion at 30 September 2008:

1. Loans and advances to banks included short term placements of €7.5 billion with ILP.

2. In the course of its business Anglo Irish Bank receives deposits from non-bank affiliates of banking groups which are shown within non-retail customer funding.

3. Where no set-off arrangements exist between deposits and loans, accounting standards require that such deposits are recorded separately as liabilities in the balance sheet.

4. At 30 September 2008 Anglo Irish Bank had deposits of some €7.3 billion relating to Irish Life Assurance plc.

We wish to clarify that the interbank placements with ILP were not cash collateral for deposits from Irish Life Assurance plc and no set-off arrangements existed.

Anglo Irish Bank confirms that ILP asked for and was provided with interbank deposits throughout 2008 and significant funding through a €3.45bn security repurchase arrangement as at 30 June 2008. Half of this amount matured on 3 July with the remainder maturing on 4 September. Anglo Irish Bank was asked for and provided to ILP significant funding through another security repurchase arrangement involving a total of €4.1bn in December 2008. This arrangement was unwound at their request on 23 December 2008. At 31 December 2008 Anglo Irish Bank had provided funding totalling €0.9bn to ILP and received funding totalling €0.4bn from ILP. The Bank confirms that all transactions have been appropriately recorded in its books and records and financial statements and in its daily, weekly and monthly regulatory returns."

IL&P in a press release also on 13 February 2009 indicate that in addition to the specific transactions mentioned in the Deputy's question the following inter-bank arrangements were in place.

"Additional Financial Information:

In the interests of clarity, Irish Life & Permanent plc (IL&P) is making disclosure of the nature and extent of the Group's dealings with Anglo Irish Bank (Anglo) across each institution's reporting dates. We emphasise again that each of these transactions was properly accounted for in the Group's [Irish Life & Permanent plc] books and records and were fully disclosed in our regular reports and returns to the Financial Regulator.

Deposits lodged with Anglo Irish Bank: On 31 March 2008, at the request of Anglo,IL&P, through its subsidiary Irish Life Assurance (ILA), deposited €750 million overnight on receipt of €1 billion cash into Permanent TSB which was offered as collateral in respect of the deposit.

During September, at the request of Anglo, IL&P, through its subsidiary ILA, deposited a total of €3.45 billion with Anglo in five separate deposits [on dates from 26 September to 29 September] accepting €3.45 billion of cash into Permanent TSB which was offered as collateral in respect of these deposits. These transactions matured on the 2 and 3 October.

On 29 September, IL&P was contacted by Anglo on three separate occasions requesting further advances which were declined as further collateral was unavailable from Anglo to support such deposits.

On 30 September, following the introduction of the Government Guarantee Scheme, and again at the request of Anglo, IL&P, through its subsidiary ILA, agreed to place a total of €4 billion on deposit overnight with Anglo on receipt of €4 billion into Permanent TSB which was offered as collateral in respect of these deposits. This transaction occurred in four tranches. These transactions matured on 1 October.

As part of IL&P ongoing wholesale funding programme, the bank enters into normal secured interbank transactions of short term duration with a number of participants including the ECB. In accordance with market norms, these involve the pledging of eligible mortgage assets in exchange for cash with the transactions being accounted for as interbank deposits.

At 30 June 2008 IL&P had outstanding €7.73 billion of such transactions. Anglo's participation in these transactions amounted to €3.33 billion. These transactions were correctly accounted for as interbank deposits in the interim accounts of IL&P.

There were no material collateralised transactions with Anglo at 31 December 2008."

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 161: To ask the Minister for Finance if his Department has accounts with Anglo Irish Bank or carried out transactions through Anglo Irish Bank; and if he will make a statement on the matter. [7452/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Department of Finance has no accounts with Anglo Irish Bank, nor has it carried out transactions through that bank.